PROVIDED NOTICE THAT CENTRAL MIDLAND RAILWAY COMPANY (CMR) AND PROGRESSIVE RAIL INC. (PGR) JOINTLY FILED A NOTICE OF EXEMPTION FOR AN INTRA-CORPORATE FAMILY TRANSACTION AND FOR REINCORPORATION IN A DIFFERENT STATE, PURSUANT TO WHICH PGR WILL REMAIN IN CONTROL OF CMR AFTER CMR REINCORPORATES FROM AN INDIANA CORPORATION TO A MINNESOTA CORPORATION.

Central Midland Railway Company (CMR)
and Progressive Rail Inc. (PGR), both Class III rail carriers, have jointly
filed a verified notice of exemption under 49 C.F.R. §§ 1180.2(d)(3) and 1180.2(d)(6)
for an intra-corporate family transaction and for reincorporation in a different
State, pursuant to which PGR will remain in control of CMR after CMR
reincorporates from an Indiana corporation to a Minnesota corporation.

According to applicants, CMR leases
and operates certain rail lines within the State of Missouri, but it is
incorporated in the State of Indiana. Applicants state that CMR, which
currently is in administrative dissolution, seeks to become a Minnesota
corporation in lieu of continuing as an Indiana corporation, and that PGR wishes
to remain in control of CMR after CMR’s reincorporation in Minnesota. PGR, which
operates certain rail lines within the States of Minnesota and Wisconsin,
acquired control of CMR in 2007.[1] PGR also controls
Airlake Terminal Railway Company, LLC, a Class III rail carrier that
operates within the State of Minnesota.[2] In addition, PGR has
obtained an exemption to continue in control of Montgomery Short Line LLC (MSL)
upon MSL’s becoming a Class III rail carrier. MSL is a wholly owned subsidiary
of PGR.[3]

Applicants state that all the assets
and liabilities of the Indiana corporation, known as Central Midland Railway
Company, will be transferred to a Minnesota corporation of the same name. Once
the transaction is completed, that corporation will be a wholly owned
subsidiary of PGR.

Applicants anticipate consummating
the proposed transaction on or after May 18, 2012, the effective date of the
exemption (30 days after the exemption was filed).

The transaction will allow CMR to
reincorporate in Minnesota, and allow PGR to remain in control of CMR. In
addition, the transaction will facilitate CMR’s return to good corporate
standing and the efficient administration of these railroads, as the headquarters
for both railroads is in Minnesota.

This is a transaction within a corporate
family of the type specifically exempted from prior review and approval under
49 C.F.R § 1180.2(d)(3).
Applicants state that the transaction will not result in adverse changes in
service levels, significant operational changes, or any change in the
competitive balance with carriers outside the corporate family. And the
reincorporation of CMR is the type of transaction specifically exempted from
prior review and approval under 49 C.F.R. § 1180.2(d)(6).

Under 49 U.S.C. § 10502(g), the Board may not use its
exemption authority to relieve a rail carrier of its statutory obligation to
protect the interests of its employees. Section 11326(c), however, does not
provide for labor protection for transactions under

§ §11324 and 11325 that involve only Class
III rail carriers. Accordingly, the Board may not impose labor protective
conditions here, because all of the carriers involved are Class III rail
carriers.

If the notice contains false or
misleading information, the exemption is void ab initio. Petitions
to revoke the exemption under 49 U.S.C. § 10502(d) may be filed at any time.
The filing of a petition to revoke will not automatically stay the
effectiveness of the exemption. Petitions for stay must be filed no later than
May 11, 2012 (at least 7 days before the exemption becomes effective).

An original and 10 copies of all
pleadings, referring to Docket No. FD 35616, must be filed with the Surface
Transportation Board, 395 E Street, S.W., Washington, DC 20423-0001. In
addition one copy of each pleading must be served on Michael J. Barron, Jr.,
Fletcher & Sippel LLC, 29 North Wacker Drive, Suite 920, Chicago, IL 60606.

Board decisions and notices are
available on our website at “WWW.STB.DOT.GOV.”